Andhra Pradesh Chief Minister YS Jagan Mohan Reddy has requested Union Finance Minister Nirmala Sitharaman to convene a meeting to find a resolution for the revival of Vizag Steel Plant (VSP) instead of the proposed divestment by the Central Government.

Among various suggestions, including allocation of captive iron ore mines in Odisha, swapping of high-cost debt of ₹22,000 crore (now at 14 per cent PA), and monetising 7,000 acres of land worth out of VSP’s huge land bank of 19,700 acres worth over ₹1-lakh crore, he suggested that the loans could be converted into equity by the banks so as to remove the interest burden totally.

Also read: AP govt backs bandh against Vizag Steel privatisation

The CM said listing Rashtriya Ispat Nigam Limited, the holding company of VSP, on the stock exchange and giving the banks an exit option by listing or offer to general public may also be explored.

In a letter to the FM on her statement in Parliament on March 8, 2021 regarding 100 per cent strategic disinvestment of RINL, he sought an early appointment for personally explaining the options along with an all-party delegation to revive VSP.

Mentioning about his earlier communications with Prime Minister Narendra Modi and the Finance Minister, he said, “I had mentioned the problems being faced by RINL and suggested various solutions to revive the plant and requested the Government to reconsider the decision of 100 per cent strategic disinvestment. I had also written to the Union Steel Minister offering my suggestions to revive RINL and make it financially strong again.”

The FM, in the Lok Sabha, had stated that the Government would go ahead with 100 per cent disinvestment of the Centre’s equity in RINL along with RINL’s stake in subsidiaries/joint ventures through strategic disinvestment by way of privatisation.

“It (the divestment) is a matter of great concern for the people of Andhra Pradesh, employees of RINL and other stakeholders,” Jagan wrote in his letter to FM.

RINL has created employment for around 20,000 people directly and many others indirectly in Vishakhapatnam.

“This plant was realised after many sacrifices by our people. The people of my state rallied for VSP in which 32 people laid down their lives, On April 17, 1970, the then Prime Minister announced the Government’s decision to establish a steel plant at Visakhapatnam culminating in the decade-long public agitation ‘Visakha Ukku-Andhrula Hakku’ in undivided Andhra Pradesh,” he wrote.

The company has around 19,700 acres of land currently and the valuation of these lands alone could exceed ₹1-lakh crore.

Also read: AP to Centre: Revive RINL’s Vizag Steel, do not divest

Against the installed capacity of 7.3 MTPA, RINL achieved the highest-ever capacity utilisation of 6.3 MTPA in December 2020, registering a monthly profit of close to ₹200 crore. Continuing this performance for a further period of two years will help the financial situation immensely, he said.

This high cost of iron ore has cost implications of more than ₹3,472 crore for RINL. Monetising the 7,000 acres of unutilised land will make the company cash-rich, he said.

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